Do Consumers Value Price Transparency?
Business Economics & Public Policy Department; Faculty Advisers: Katja Seim, Maria Ana Vitorino
We examine the role of price transparency in consumer preferences and demand. We assemble a detailed dataset on the driving school industry in Portugal to quantify how firms present the price of the course of instruction, and its individual components, to potential students. Our unique data allows us to estimate a structural model of school choice and measure the impact of varying levels of price information on demand. The results show that consumers are willing to pay a significant amount for price transparency, on average 11% of the service price, and that consumer demographics drive heterogeneous preferences for transparency.
Publications, Presentations & Awards
Seim, Katja, Maria Ana Vitorino and David M. Muir (2017), “Do Consumers
Value Price Transparency?” Quantitative Marketing and Economics, 15 (4), pp. 305-339. https://link.springer.com/article/10.1007/s11129-017- 9193-x
Alfred Lerner College of Business and Economics, The University of Delaware
Carlson School of Management, University of Minnesota
Foster School of Business, University of Washington
LeBow College of Business, Drexel University
Sauder School of Business, University of British Columbia
Stern School of Business, New York University
The Wharton School, University of Pennsylvania